Deal on "Fiscal Cliff" to determine gas prices at start of 2013
Motorists in the new year could see gas prices decline or increase depending on how lawmakers handle the country's fiscal situation.
AAA Motor Club says while gas prices are likely to rise into next year, whether or not a deal is made to avoid the fiscal cliff will determine if prices continue on an upward trend.
According to AAA, if a resolution to avoid the fiscal cliff is implemented, motorists are likely to see pump prices increase for an extended period of time as the positive news is sure to create economic optimism in the market. However, if the economy falls off the cliff, prices will most likely retreat on speculation fuel demand will fall even further than it has in the past few months.
Currently, oil prices are holding steady around $90 a barrel as a deal on the fiscal cliff remains unknown and U.S. gasoline stockpiles are at a nine-month high as demand continues to wane.
"Almost everything is riding on whether or not a deal is made to avoid the fiscal cliff," said Jessica Brady, AAA spokeswoman, The Auto Club Group. "If the fiscal cliff is not avoided and the economy falls back into a recession, we're sure to see gas prices drop as fuel demand recedes. If a plan is put into place, gas prices will likely continue to increase throughout January, however it's doubtful we will see an immediate spike in fuel demand."
A barrel of oil closed Friday at $90.80 on the New York Mercantile Exchange.
The national average price of regular unleaded gasoline is $3.29, 4 cents more than last week. Florida's average of $3.36 increased 8 cents from last week, Georgia's average of $3.25 rose 7 cents, and Tennessee's average of $3.12 increased 5 cents from last week, respectively. Visit AAA's Daily Fuel Gauge Report to find national, state, and local metro market retail gasoline prices.